Make FD or start investing in mutual funds through SIP, you know the answers to all your questions in just 2 minutes
New Delhi: Once in fixed deposit your money used to double in 6 to 7 years, today it will take about 12 to 13 years for your money to double. Now you will say where to put your money, then we are giving the answer in just 2 minutes. You are already knowing that whether it is a bank or post office, now your money will not have wings. Fixed deposit rates are currently around 6 to 7 percent. That is, 12 to 13 years have not gone anywhere when you will see your money doubling. And let’s talk about inflation. Which you can also call inflation witch. She is also eyeing close to 6 to 7 percent. That is, every year the value of your money is decreasing. If you have Rs 100 then next year its value will be close to Rs 93. The most suitable option left with you in the current era is investing in mutual funds. You can get great returns by investing your savings in it.
Do not ignore the effect of inflation witch
Now just imagine that if you put Rs 2 lakh in your fixed deposit for the next 12 years thinking that your money will double, then after 12 years its value will remain the same according to today’s inflation. That is, 4 lakhs of that time will be equal to 2 lakhs of today. All this math is based on today’s interest rate of 6 to 7 percent and ‘Rule of 72’. If the same interest rate is found to be around 12 percent then? Then you will get around 7 lakh 80 thousand money in 12 years, and if you are successful in generating 15% return then your 2 lakh will become more than 10 lakh 70 thousand. This is not a fantasy. These sixteen annas are true. And this is where the theory of mutual funds is born. Which is considered the eighth wonder of the world by investors around the world including Warren Buffett.
How to Invest in Mutual Funds
Before investing in mutual funds, it is important to understand which fund is right for you. You will find two types of mutual funds, active and passive. If you want to take the very low risk. If you have faith in the economy of the country. It is certain that in the next 10 to 20 years, India will be on a new peak of progress. Then you should invest in passive funds. This will give you two advantages. The first advantage is that you do not have to pay fees to the fund manager. In the long term, these fees reach into lakhs and the second advantage is that with time, your fund will also grow automatically in the growing stock market. His Net Asset Value (NAV) keeps on increasing.
How to Invest in Index Funds?
You can choose an index fund from any fund house to invest in an index fund. Just keep one thing in mind that that fund should be direct and not regular. This means that if you take any fund through an agent of a mutual fund, then there is also a commission in it that will go out of your pocket. It is better that you take a direct plan. For this, you can see the list of well-performing index funds in Google. His track record of the last 5 years can be traced. And then you can invest in it when you are satisfied. Keep in mind that you can do both SIP or Lumpsum. Do Lumpsum when the market is falling. And invest money every fall by not putting money all at once. Just keep in mind that you invest for the long term. The longer you give, the more money the mutual fund will make you.
How to get up to 15% return
In today’s time it is common to get 12% return from any mutual fund. But keeping some things in mind, you can generate returns of 15 percent or more. Then for that you have to invest money on every market correction i.e. when the stock market falls, instead of putting all your money in lumpsum at once. As we have taken the example of Rs 2 lakh above also, let us take the same forward. In any fund, you should enter when there is a decline of at least 1.5 to 2 percent in the market. Since we are talking about index funds here, you should choose one fund in advance and keep investing little money on the downfall of the stock market. Keep in mind that you do not invest money when the market is bullish. Put a little more money if the market falls a lot. Don’t be in a hurry to invest your entire money in index funds in this manner. Take 6 to 8 months to invest the money, so that you can get your money in the market on the right correction, so that you can easily get up to 15 percent return in future.
How to Invest in Index Funds
Since here we are talking about index funds, so follow the index related to the category of index fund you have chosen. Simply means if you want to invest in Nifty-50 Index Fund, then wait for Nifty-50 to fall below. For example, if the Nifty-50 falls by about 200 points, you can start by investing around 10 per cent of the total money you have with you. Then wait, if in a few days the current level falls again by about 200 points, then you have to keep your next 15% money ready. Continue like this. But this is possible when the market is continuously falling down, as was seen during the Corona period in March 2020. That is, Bearish Pattern is being formed.
Wait while the stock market rises
Now you will say what to do when the market is rising. The answer is, wait. And be ready to take a new level with another index fund. Because if in the previous index fund assuming that you have invested some money at the level of 17500, then wait for it to come down to the level of 17300. Since you may have to wait a long time after following the Bullish Pattern. And it is possible that the market keeps on increasing, that is why you have been advised to wait for about 6 to 8 months. If still Nifty 50 does not come at the level of 17300, then you start from a new level in another index fund. Exactly following the above mentioned method. That is, if the level of Nifty-50 has gone to 17800, then you wait for it to come till 17600. And in this also follow the above-mentioned method. If you do this, then believe that in the long term, your money will definitely have wings, and keep this long term for more than 5 years. 10, 15, 20 years or more is good. Because you may not get much benefit from investing in the short term. The more time you give in the investment journey, the more time you give to grow your money, the more financially independent you will be in future. Now you have to decide whether you want to live in the present or make the future better.
